Tom Walsh: MEDC exec goes to Pacific to raise money for state

February 17, 2013

Detroit Free Press Business Writer

Paul Brown

On Wednesday this week, Paul Brown is to take off on a business trip to Hawaii, Guam and Saipan, the largest of Northern Mariana Islands in the western Pacific Ocean.

Tough duty for a Michigan public servant in February, eh?

Incredulous as it may sound, Brown, vice president of capital markets for the Michigan Economic Development Corp., is generating money for Michigan's treasury by peddling the state's expertise in running small-business lending programs to other states and U.S. territories.

The Northern Marianas, for example will be paying the MEDC up to $60,000 to help run back-office operations for such loan programs administered by the U.S. Treasury.

During the dark days of 2009, Michigan created special loan support programs to help keep automotive suppliers alive when credit markets were frozen and banks were downgrading the value of machinery and other assets used as loan collateral.

Those programs, initially funded with $26 million from the Michigan Strategic Fund, later became the model for the U.S. Treasury's $1.5-billion State Small Business Credit Initiative (SSBCI), which was pushed by Michigan's congressional delegation and signed into law by President Barack Obama in September 2010.

Nearly 2,000 Michigan businesses have been supported by these loan programs, without a single default, Brown says.

Michigan was the first state to apply for and receive its allocation -- $79 million -- of federal funds under the new law. And the MEDC and Brown have since been deputized by the feds to assist other states and territories in implementing SSBCI programs.

Brown has traveled to more than 20 states and the U.S. Virgin Islands to speak at conferences or consult on the SSBCI loan programs. It's not exactly what he expected when he and his wife, actress Nicole Forester, uprooted themselves from New York City in 2009 to return to their home state of Michigan when Forester was pregnant with their first child.

Brown, a native of Petoskey, was an attorney with the prestigious Wall Street law firm Skadden Arps, and Livonia native Forester had won a daytime Emmy nomination for her work on the soap opera "Guiding Light" before their move.

During the heat of the financial crisis and auto bailouts, Brown became the MEDC's point man on the new loan programs and found himself in the West Wing of the White House, pitching them to Larry Summers, then Obama's chief economic adviser. Brown later testified in Congress about SSBCI.

Brown credits former Gov. Jennifer Granholm with pushing the MEDC to do whatever it could to help auto suppliers in distress back in 2009 and says a smooth transition under Gov. Rick Snyder has enabled Michigan to emerge as a national leader in designing effective public-private finance programs.

"I think it's no coincidence that we have officials who are skilled and experienced in finance," Brown says, referring to Snyder's background as an accountant and venture capitalist, Treasurer Andy Dillon's experience as a private equity investor, and MEDC President Mike Finney's record as an early-stage and venture capital finance expert.

As for himself, Brown said he and his wife and two young children are happily resettled in Michigan now. Forester has recently appeared in the Tom Cruise movie "Jack Reacher," the TV drama "Boss" with Kelsey Grammer, and has a recurring role on the NBC series "Chicago Fire."

"We love it here," Brown says. "We don't want to have to leave."

That said, as the dedicated public servant he is, Brown will suck it up and force himself to take that long trip to the tropical Pacific, so he can earn a few bucks for his home state.